Britishvolt Collapse: How Britain’s £3.8bn Battery Dream Died
In December 2019, two Swedish entrepreneurs launched Britishvolt with a bold vision: to build Britain's first gigafactory and power
In December 2019, two Swedish entrepreneurs launched Britishvolt with a bold vision: to build Britain’s first gigafactory and power the nation’s electric vehicle revolution. Just over three years later, the company collapsed into administration, taking 300 jobs and billions in promised investment with it.
The Britishvolt collapse stands as one of the most dramatic corporate failures in recent British industrial history, raising uncomfortable questions about ambition, execution, and the government’s role in backing national champions.
A Grand Vision
Britishvolt was founded by former investment banker Orral Nadjari and automotive entrepreneur Lars Carlstrom. The startup’s ambitions were enormous from the start: a £3.8 billion gigafactory in Blyth, Northumberland, that would produce 30 gigawatt hours of batteries annually, enough for 300,000 electric vehicles.
The location itself was symbolic. Built on the site of former coalyards near a decommissioned power station, the factory represented the UK’s transition from fossil fuels to clean energy. The project promised 3,000 direct jobs and another 5,000 in the supply chain, bringing highly skilled employment to an area long starved of investment.
Politicians embraced the vision enthusiastically. Former Prime Minister Boris Johnson hailed it as a “levelling up opportunity” and a cornerstone of his promised “green industrial revolution”. The government pledged £100 million through its Automotive Transformation Fund.
Early Momentum
For a time, everything seemed to be falling into place. In August 2021, mining giant Glencore invested in the company and signed up to supply cobalt. Major institutional investors including Ashtead Group followed suit. By February 2022, Glencore topped up its investment with another £40 million, valuing Britishvolt at over $1 billion.
The company secured memorandums of understanding with luxury carmakers Aston Martin and Lotus. Construction began in September 2021, with ISG appointed as the building partner. Universities signed research partnerships. The momentum looked unstoppable.
But cracks were already forming beneath the surface.
Warning Signs
Co-founder Lars Carlstrom resigned as chairman in December 2020, just days after the Northumberland site was announced, following revelations about a tax fraud conviction in Sweden. Though he claimed the issue was being used to distract from his concerns about the company’s direction, his departure was an early warning sign.
By August 2022, the situation had deteriorated badly. Documents leaked to The Guardian revealed Britishvolt was on “life support”. Construction work was scaled back. Founder and chief executive Nadjari stepped down. Production targets were pushed back 18 months to mid-2025.
The Financial Times reported troubling details about the company’s spending. With nearly 300 employees on the payroll but years away from generating revenue, Britishvolt was burning through £3 million monthly. Reports emerged of expensive electric company cars, hospitality suites at motorsport events, prolific private jet use, and other lavish expenses that seemed at odds with a startup fighting for survival.
The Final Descent
The government’s promised £100 million never materialised. The funding was conditional on hitting construction milestones, which Britishvolt failed to achieve. In October 2022, when the company requested a £30 million advance to stay afloat, the government refused.
Glencore provided emergency funding in November, enough to keep the lights on for five weeks. Staff agreed to temporary pay cuts. But it was merely delaying the inevitable.
Last-ditch rescue talks with various investor groups all collapsed. On 17 January 2023, Britishvolt entered administration. Accountancy firm EY was appointed to manage the insolvency. The majority of the 300-strong workforce was made redundant with immediate effect.
What Went Wrong?
The Britishvolt collapse revealed fundamental problems that had plagued the company from the start. Unlike successful battery manufacturer Northvolt in Sweden, which secured massive orders from Volkswagen before building its factory, Britishvolt never landed a major customer. Its memorandums with Aston Martin and Lotus sounded impressive, but these manufacturers produce fewer than 7,000 cars annually combined. Volkswagen alone delivered 330,000 electric vehicles in the same period.
Without firm orders, Britishvolt couldn’t attract the large-scale infrastructure investors needed to fund a multi-billion pound factory. The technology remained in testing stages, making it impossible to demonstrate commercial viability.
The company also appeared to struggle with basic execution. Hiring aggressively whilst still years from revenue, spending lavishly on perks, and missing construction milestones all pointed to management problems.
The Broader Impact
The Britishvolt collapse dealt a hammer blow to UK ambitions in electric vehicle manufacturing. At a time when the government had pledged to ban new petrol and diesel car sales by 2030, the country was left with just one battery plant: a Chinese-owned facility near Nissan’s Sunderland factory.
Industry analysts warned that Britain needs at least five gigafactories by the end of the decade to remain competitive as manufacturers transition to all-electric ranges. The EU, by contrast, had 35 battery plants either operating or under construction.
Shadow business secretary Jonathan Reynolds called the failure “a symptom of a much wider failure”, criticising the government’s industrial strategy. Union officials were scathing, with Unite’s Steve Bush describing it as “a dreadful and total abdication of leadership”.
A Second Chance?
In February 2023, Australian startup Recharge Industries acquired Britishvolt’s assets for approximately £30 million, plus commitments to pay creditors and potentially purchase the Blyth site. The company promised to resume construction by late 2023.
But history repeated itself. Amid continued financial difficulties, the funding deal was never finalised. In April 2024, the Blyth site was sold for redevelopment as a data centre campus. By November 2024, Britishvolt formally entered liquidation.
The dream was finally, definitively dead.
Lessons from the Britishvolt Collapse
The failure offers sobering lessons for anyone building capital-intensive businesses. Grand visions mean nothing without customers. Government support is conditional, not guaranteed. Spending must match revenue reality, not future promises. And in technology-dependent industries, proven capability matters more than ambitious projections.
Most fundamentally, alignment between ambition and execution is everything. Britishvolt had the former in abundance. The latter proved fatally lacking.
For Britain’s electric vehicle industry, the Britishvolt collapse serves as a painful reminder that catching up in the global battery race will require more than political rhetoric and startup enthusiasm. It demands patient capital, firm customer commitments, proven technology, and disciplined management.
Whether the UK can learn these lessons and build a genuine battery manufacturing sector remains an open question. But the story stands as a cautionary tale of what happens when national champions are built on foundations of sand rather than solid business fundamentals.
Sources
Financial Times – Britishvolt: the battery start-up that burned through cash
The Guardian – Britishvolt collapse analysis and coverage
BBC News – Britishvolt administration and aftermath
Reuters – Britishvolt enters administration
